Homebuyers consider many factors when purchasing a home, such as good schools, proximity to work or a yard with mature trees. But a property’s history can be equally important. Over the lifetime of a property, items such as liens, easements and unpaid taxes may raise questions about who actually has rights to the land. Title insurance helps protect you in case someone makes a claim against your property.
                                                 
Since the first policy was written in Texas more than 100 years ago, title insurance remains an extremely important part of purchasing homes and other property.  
 
Unfortunately, most consumers don’t understand title insurance and what kinds of protection it offers.
 
A title is your legal right to ownership and possession of a home or other real property, and title insurance helps protect against problems that could affect your legal right to own and enjoy it.
 
During a real estate transaction, title companies uncover potential problems that could cause you to lose rights to your property. Title companies help fix these problems before the deal closes and the property officially changes hands.
  
Unlike property and casualty insurance products, consumers only pay for title insurance once. The owner’s title policy is good as long as they own the property, and the loan policy is good for the life   of the loan. New title insurance policies are necessary with a loan refinance.
  
Another key difference is that title companies perform work on the front end, rather than insuring against future risks. In this way, title insurance is more assurance than insurance, with premium costs primarily covering the labor and expense of this preventative work. Current title insurance regulations also set standards for the quality and thoroughness of the records being searched, as well as the timeliness of filing documents.
  
What can make a title defective?  
  
Missing court records, tax liens, divorces and forgeries are just a few things title agents work to identify and clear up before issuing a policy. Title agents search land records extensively, scour court documents and work with attorneys, surveyors, tax authorities and others to uncover information that may turn up defects.
  
Texas has one of the most comprehensive and effective title systems in the country, which is fundamental to our state’s traditionally robust real estate economy. Our system protects consumers and provides access to high-quality title insurance statewide.
  
The regulated Texas title insurance system is transparent and consistent, so consumers know what they are paying for when presented with a settlement statement.   Likewise, the adoption of rules, policies and rates is an open process. Meetings and hearings are publicly noticed and open to members of the public. Consumers are represented in these proceedings by multiple parties.
  
The Texas premium is an “all inclusive rate,” meaning services are included in our premium, rather than charged separately as in other states. This fact is seldom taken into account when making multistate comparisons.
  
The 3.8 percent adjustment to the premium rate that went into effect May 1 is the result of extensive analysis of statistical data from the Department of Insurance. This is the first time title insurance rates in Texas have increased in 22 years. During those intervening years, rates actually decreased by about 20 percent.  
 
In 1991, for example, the premium for a title insurance policy on a $100,000 purchase was $1,023. That same premium today — even with the recent increase included — is just $875.
  
Of course, title insurance doesn’t guarantee your property won’t have a problem, but it does provide assurance that the title company will help fix the problem or compensate you financially for covered claims if a problem does surface — a comforting fact for homeowners.

RANDY PITTMAN: TEXAS LAND TITLE ASSOCIATION